VILLAGE AND SMALL INDUSTRIES
SECTOR
TRADITIONAL SMALL MODERN SMALL
INDUSTRIES INDUSTRIES
HANDLOOMS HANDICRAFTS POWERLOOMS
SMALL SCALE
INDUSTRIES
COIR KHADI
VILLAGE
SERICULTURE
INDUSTRIES
PARAMETER USED TO MEASURE THE SIZE OF
BUSINESS
• Number of persons employed in business
• Capital invested in business
• Volume of output
• Value of output of business
• Power consumed for business activities
• Definition used by the Government of India
to describe small industries is based on the
investment in plant and machinery and
turnover.
• The MSMED Act, 2006 came into force
w.e.f., October, 2006
Micro, Small and Medium Enterprises
Type of Units Investment in Turnover
Plant and
Machinery
Micro Enterprises 1 Crore Does not exceed 5
crore
Small Enterprises 10 Crore Does not exceed 50
crore
Medium Enterprises 50 Crore Does not exceed 250
crore
ROLE OF SMALL BUSINESS IN RURAL INDIA
1. Employment opportunities-It provides employment in
the rural areas, especially for the traditional
artisans and the weaker sections of society
2. Migration – It helps in development of village
and prevents migration of rural population to urban
areas
3. Reduction–It helps in reducing income inequalities,
poverty & also helps dispersed development of
industries
4. Balanced development- It contributes to the
balanced regional development & accelerates industrial
growth in our country
DEVELOPMENT
RURAL URBAN
5. Cost- It has advantage of low cost of production as locally
available resources are less expensive & running costs are on
the lower side because of low overhead expenses
LABOUR
RAW
MATERIAL
OTHER
INPUTS
6. VARIETY- It supplies a variety of products which
include mass consumption goods, readymade garments,
hosiery goods, stationery items, soaps and detergents,
handlooms, handicrafts
GOVERNMENT ASSISTANCE TO SMALL
BUSINESS UNITS
1. Govt. Incentives(Measures & Schemes)
➔ Power: Some states supply power at a confessional rate of 50%.
➔ Tax holidays: Exemption from payment of tax for 5 years.
➔ Land and Water: Availability of land at confessional rate. Water is
supplied on no profit no loss basis.
➔ Protective Measures: The government reserved 800 items for
exclusive production by the small scale Industries and give
priority in allocation of raw materials and machines.
➔ Marketing Assistance: Government tries to solve their marketing
problem by improving information
➔ Finance: Subsidy of 10-15% for building capital asset. Loans
are offered at confessional rates.
2. INSTITUTIONAL SUPPORT
I. National Small Industries Corporation (NSIC)
This was set up in 1955 to promote, aid the growth of small scale units in India.
● Machines-Supply indigenous and imported machines on easy F
hire-purchase terms. U
● Raw material- Procure, supply and distribute indigenous and N
C
imported raw materials. T
● Export-Export the products of small business units and develop I
export-worthiness. O
● Advice-Mentoring and advisory services. N
● Incubators-Serve as technology business Incubators. S
● Aware- Creating awareness on technological upgradation.
● Parks- Developing software technology parks and technology transfer
centres
2. District Industries Center (DIC)
The District Industries Center was launched on 1 May 1978, with a view to providing an
integrated administrative framework at the district level
● Schemes- Identification of suitable schemes F
● Reports- Preparation of feasibility reports U
N
● Arrange-Arranging for credit, machinery and equipment C
● Provide- Providing raw materials and other services T
I
● Support- Provides marketing support O
● Connection- Helps businessman in obtaining connection from N
S
Electricity board, water supply board etc.
